Postal Reform Legislation A Reality in the 115 th Congress April 2017 Historical Context 2006 Passage of the Postal Accountability and Enhancement Act PAEA Predictable rate making tied to CPI ID: 646278
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Slide1
Ken Garner, Executive Vice President, Idealliance
Postal Reform Legislation – A Reality in the 115th Congress?
April 2017Slide2
Historical Context
2006 Passage of the Postal Accountability and Enhancement Act (PAEA)Predictable rate making tied to CPI
Mandated retiree health insurance plan pre-funding requirement
~ $5.5 billion / yearSlide3
A long and winding road
USPS balance condition that would require bankruptcy for any publicly traded company
OGR Committee Hearing (2/7/16)
The USPS has $121 billion in unfunded liabilities
Total liabilities exceed total assets by $56 billion
The USPS has defaulted on their retiree expense prefunding requirement for the past 5 years = $33 billion
The USPS has exhausted its borrowing authoritySlide4
HR 5714
Despite a dedicated effort to promote and pass legislation over an 8-year period, no meaningful progress was made until 2016 and the 114th
Congress
Led by Jason
Chaffetz
, Chairman of the House Oversight and Government Reform Committee, HR 5714 was introduced containing the following major provisions
Required integration of postal retirees into Medicare
A one-time increase in postage rates of 2.15% Slide5
HR 5714
The combination of these two provisions would eliminate the need for future mandated retiree health insurance payments and eliminate the $33 billion from the balance sheet. HR 5714 received a positive “score” from CBO (~$2.2 billion over 10 years)
Resistance / opposition from the Ways & Means Committee based on the bill’s impact on Medicare costs (~1/10 of 1%).
What happened???
We ran out of time.Slide6
What lead to progress after 8 years of futility?
Chaffetz’ elevation to OGR chairman and his ability to drive strong bi-partisan support
An unprecedented “partnership” between Postal leadership, Postal unions, and industry
Strong work done by C-21 Coalition and several industry associationsSlide7
Where are we now?
HR 576 introduced early in the 115th Congress (same major provisions)
Anticipate a stronger CBO score (~$5.5 billion)
Still fighting resistance from W&M ($30 billion)
Lots of meetings currently taking place with members of the W&M Committee
Need House passage with overwhelming support
Working on drumming up support in the SenateSlide8
Why is this so important?
Potential impact on the current PRC review of the rate making process – clean up the balance sheet!Slide9
Q & A
Ken GarnerExecutive Vice President
kgarner@idealliance.org
703.837.1065Slide10